Blended families, superannuation and death benefits – what you need to know

Are you in a blended family relationship?  If you answered “yes” to this question, read on. By way of an example, let’s say that you are now in a relationship where you have children from a previous relationship and your partner, spouse or de-facto has children from his/her previous relationship. With regard to your superannuation you need to be aware that your superannuation does not form part of your estate and as such cannot be provided for in your will. That is, under the superannuation rules your death benefit can only be paid to your “dependants” ie your spouse and children. If the trustees of your superannuation were to pay your accumulated superannuation out to your new partner in the event of your death then your children may not see any of these funds. That is, in the event of your new partner’s eventual death he/she may distribute these funds to his/her children. Many people feel that the above distribution should not occur as they are not married to their new partner. The superannuation legislation defines “spouse” to include a person who is married to the deceased at the date of death, however it also includes a person who is in a bona fide domestic relationship with the deceased at the date of death. One possible solution to this problem is to prepare a Binding Death Benefit Nomination which specifies who are the beneficiaries of your superannuation when you die. It is also critically important to review your binding death benefit nomination from time to time, generally every two years, in case your circumstances change. Finally, this binding death benefit nomination is a very particular form. If this form does not follow the rules it will not comply and can be disregarded by the trustees of your superannuation.   Should you require any information on the above please contact Peter Quinn by submitting an online enquiry or calling us on +61 2 9580 9166 to book an obligation free appointment.  The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it.  It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.